You Deserve Better Than A 1% Cashback Card

Ok, so it’s pretty obvious that when picking a rewards card, you want one that gives you beer money, not free toasters. A toaster is a depreciating asset, which are for rappers, not smart persons like yourself.

So which cashback card do you pick? Many offer 1% of your total purchase amount as cashback, but My Money Blog recommends the Fidelity Investment Card with its 1.5% cashback equivalency.

To get that extra cash, you’ll need to take a few extra steps.

Every dollar spent equals 1 point. 5,000 points equals a $75 deposit into a Fidelity account.

If you don’t feel like parking your cash in a Fidelity account, there’s no fee for transferring out the cash into your back account and keeping the Fidelity balance at zero. If you don’t have a Fidelity account, you will need to make an initial $2500 deposit to open one, but you can withdraw it right after.

It won’t mind, it’s only a bank account.

Why You Shouldn’t Settle For a 1% Cashback Credit Card [MyMoneyBlog]

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  1. Kaix says:

    I’m happy with my Citi Reward card that gives 5% back on purchases at grocery stores, gas stations and drug stores. Everything else gets 1% cash back. This card is great if you have a lot of prescription medications and/or buy a lot of gas or groceries. Citi no longer offers this card (probably because they were losing money on it)… So far I’ve earned over $100 cash back and haven’t paid a dime in interest charges (card gets paid off every month). Take that Citi!

  2. woolygator says:

    Household Bank has a 2% cash back why go to Citi?

  3. punkrawka says:

    Bank of America used to offer 2% cashback on their reward card ($1,000 rebate for accruing 50,000 points), but they unceremoniously dropped that reward and now the highest is the standard 1% ($200 on 20,000 points). Maybe this one is worth considering… thanks Consumerist!

  4. SpamFighterLoy says:

    Chase offers a card where you can choose and then change the rewards as often as you like without changing the account.

    We have been very happy with the Disney points reward — it’s only 1%, however, Disney cardholders get offers that others don’t. We took a week-long vacation to Disney last January that cost less than $2K all included. For the four of us. No one we know has been able to beat that deal and it effectively ending up giving us 2 or 3% rewards back.

    When the kids no longer want to go back to Disney, we’ll switch it to the card listed above. Chase *does* still offer 5% back on necessities and 1% back on everything else.

  5. pacfolly says:

    I use a PayPal debit card.

    You earn 5+% interest on money in your account and earn 1% cash back on purchases without a PIN when you use your debit card.


    It’s very easy to transfer money, and when you add a new bank account, to verify it they make 2 deposits anywhere from $.01-$1. (Then ask you to verify the ammount.) I got $.47 and last month I earned $6.96 in interest.

  6. solmssen says:

    I like my Shell Mastercard from Citibank a lot – it’s 5% back on gas from Shell, 1% back on anything else. I’d be brand-loyal to Shell anyway, I find cars just run better on Shell gas, but getting the rebate is nice. It lowers my monthly gasoline bill about 15-20 bucks every month.

  7. clutz123 says:

    If you read the full blog post, I think this card is suggested to be used as a 2nd card to all those 5% off gas-type cards, as most of them only give you 1% on everything else.

  8. MonkeyMonk says:

    It seems the trick is to find a card that offers a larger cashback % on something you spend the most money on. I use the Costco/Amex True Earning Card that offers 3% cash back on eating out (which I love to do), 2% on travel expenses, and 1% on everything else.

    The only drawbacks is the $50 annual fee (which covers both the Amex and Costco) and that I need to cash the annual redemption check in person at a Costco.

  9. FLConsumer says:

    I’ve been using a Wachovia Visa card. 1.5% back across the board and no limit on how much cash back I can rack up in a year. I believe most cards limit you to $300-500/year in cash back.

    I can hear some people saying, “Who spends more than $20,000-$33,000/year on a credit card?” Quite simply, between work & business, I do. That’s only $1,700-$2800/month, which I’m sure some readers find themselves spending in a month. I maximize my cash back by offering to pay for things on my CC for work and let them reimburse me. We need a new video projector for the boardroom? Okay, I’ll go out & get it — That’s $50 cash back for me.

    Some towns in Florida are starting to pay for major construction projects, such as government buildings and bridges, via credit cards now as well. The town gets a discount and the contractor gets paid immediately for each draw. It’s a win-win for both sides.

    At the end of the day, you still should look at why the credit card cos are doing this. They’re not offering you a 1.5% discount because they’re nice people — they’re hoping like hell that you’ll screw up a few payments, carry a balance, and rack up far more $$$ than they’re paying out in reward points. It’s probably the only business I know of which DOESN’T want people to pay their full bills on time, every time.

  10. FMF says:

    I like American Expresss Blue Cash. I was able to earn 1.68% last year using it (you get a lower rebate for the first few thousand charged and a higher rate after that.)

  11. Franklin Comes Alive! says:

    Yeah the Citi Dividend card is (was) good, until they chopped the benefits on it. They dropped the 5% to 2% for existing cardholders and stopped offering it to new ones. If it hasn’t happened to you yet, it will once you’ve been a member long enough. It’s BS.

  12. joelmeu says:

    You can use the free calculator tool at Credit Card Tune-Up: Maximize Your Cash Back Rewards ( http://www.CreditCardTuneUp.com ) to see which card or cards will pay you the most for your spending profile.